The ACD of buying behaviour

Many organisations that we work with struggle as their customers often prevaricate when it comes to simply saying yes we will go ahead and buy what you have proposed. Although not the preferred answer, even a no would be acceptable because it is at least certain. What none of us likes is the uncertainty of will they won’t they.

Understanding what happens in someone’s mind when considering whether or not to buy can help the seller both to understand why there might be a delay in the decision and more usefully what can be done to minimise or eradicate that delay. The three main stages in a buying process are Awareness, Consideration and Decision. The solution to eradicate or at least minimise delayed decisions can be found in the earlier stages of awareness and consideration. Waiting until the prospect has entered the decision phase to influence how it might proceed is too late and the seller has, in the main, become a passenger in the process. That said, many “purchasers” don’t have a process for making the decision so there is nothing obvious the seller can do to apply influence.

By the way; I am of course fully aware that the majority of people reading this wear both hats; sellers and buyers and understand the ACD of buying behaviour can benefit all.

Looking at the three stages and what happens in them gives a valuable insight to what sellers can do to influence buying behaviour. The messages in the article are designed to be of equal use regardless of which hat you may be wearing; seller or buyer – no one wants to waste time prevaricating over a decision any more than they would wish to wait for that decision.

Awareness

This is the point or, more likely, series of events that makes a prospect aware that they have a problem that may need to be solved. Imagine; you have had an occasional mystery noise from the car but ignored it. Then there comes the rainy night when it won’t start but eventually it does, then it does it again, then it runs badly in hot weather. Eventually you will conclude that this series of issues might just be clustering together into a real problem. You are now aware.

The above scenario is common in a domestic setting but there is another more common scenario in the business world. As business leaders and other decision makers typically have a multitude of competing issues to consider, the process of issues “clustering” to create an actual problem may take quite some time. This is where the role of a sales person or account manager can provide a valuable service to the prospective buyer. The sales person who understands the industry that the prospective buyer is in will be familiar with the typical issue and problems of that industry so can play a valuable part in raising awareness and in many cases before the problem stage is reached.

Consideration

LI Choice
This will include; can I ignore it or must I fix it, when does it need to be fixed by, can I fix it myself, how much will it cost to fix/ignore, how will I finance it, what impact will the decision have on the business? There will be many other factors especially when making complex business decisions or potentially costly personal ones.

We have written in previous articles about the research which suggests that a “buyer”, especially for a complex or bespoke solution, will on average be 57% of the way through the buying journey before they engage with potential suppliers. We have also publicised another piece of research that found some 75% of new business orders go to suppliers who engage before the potential buyer has reached the 25% mark in their buying journey. We have drawn a number of conclusions from these two sets of findings:

  • The supplier who engages early will be in pole position to win more of the available business
  • The suppliers who wait for the buyer to engage them will be left fighting against pre-conceived ideas, or just fighting over the crumbs and in most cases will need to compromise on price and margin to win the work
  • The buyer who engages early benefits from the suppliers’ knowledge and experience to inform the process of consideration
  • The buyer who engages with suppliers late in the process may fail to get the optimum solution as the engagement process typically focuses on price not value. Critically, they may also address only symptoms and miss the root cause leading to new symptoms popping up. (the operation was successful, but the patient died)

Most cases of prevaricating buyers are found in late engagement scenarios. This is bad for both sides; the buyer is delaying solving the problem which often causes waste (time, money and other resources) and the seller does not have a clear picture of future revenue as the sales forecast cannot be relied upon.

Decision

Hopefully this won’t offend too many of our readers but most people are poor at decision making. The cause is the lack of a systematic process for evaluating and selecting a solution. That process should mainly focus on clinical matters such as; performance, reliability, quality, service levels, etc. It is also natural that the process will include an element of emotion as the decision maker will be concerned about the consequences of making a mistake and this leads to risk aversion behaviour driven by fear, uncertainty and doubt.

A common mistake made by both sellers and buyers is to try to mitigate the risk by doing a financial deal. How odd – “I am uncertain about your offer but if you make it cheaper I will go ahead”. Who is kidding who!? How can a lower price suddenly make a risky purchase acceptable? Similarly, how can a lower price make something that was not ideal for the job at a higher price an acceptable option?

The decision process is always smoother and more predictable, for both parties, when the initial engagement point occurs early in the buying cycle. One key reason is this gives more time for the parties to work together which means more time to test the potential relationship; principles, ethics, capability, delivery mentality, etc. It also allows time for the seller to meet and understand everyone who will be involved in the decision and for the parties to work out a mutually acceptable decision making process.

Another important factor in decision making arising from early engagement is that it gives suppliers time to understand the real problem, not just the symptoms, which in turn enables them to offer the correct solution. Some of the more cynical amongst us might consider this allows the suppliers to have too much influence over the thinking of the buyer to which I would say the buyer always has the ultimate sanction – “NO!”

In summary:

  • Engage early – this is good for both seller and buyer but is more likely to be driven by sellers.
  • Engage widely – both sides need to meet all key people who will be involved in the delivery and operation of the solution as part of the process of deciding the best fit for a successful implementation.
  • For the buyer – choose your preferred supplier before starting to look at solutions; someone that understands your problem and empathises with its impact on your business. A key reason leading to delayed or failed decisions stems from confusing the selection of the supplier with the decision over the product or solution. The initial effort should focus on building the working relationship including how and when a decision will be made.
  • For the seller – decide who you want as your customers and proactively approach them. By all means accept introductions and referrals but beware of compromising your market strategy – you don’t have to say yes to everything!
  • Once the parties have agreed they wish to work together then they can focus jointly on designing and building the solution. This can now be done from a position of mutual trust and interest which is the best way to get the optimum solution while controlling the risks.

Get the ACD right and the decision will flow naturally from the process with a contract close behind!

Do you use compelling events to drive sales decisions?

Previously we have written a number of articles about an issue that is currently a problem in many business sectors and that is prospects who delay making decisions, or become un-contactable, once a proposal or quotation has been submitted. This can happen in any type of businesses but seems to be hitting those selling B2B the hardest.

The solutions that we have proposed in the past focus mainly on changing how the process of engagement is conducted from the very first point of contact with a new potential customer. Whilst this is the only effective way to bring about a long-term and permanent solution the use of ‘compelling events’ will in some cases help to move an opportunity that has become stuck.

The most common compelling events involve the use of time or money to get the prospect to “act now”. While both have a place they are often used in a very unsubtle way which risks doing more harm than good. So, in this article we have provided some tips as to how this powerful tool can be used to unstick some deals and if applied rigorously to new opportunities it will help to avoid the sales pipeline log-jams of the future. This will help you to gain some certainty about if, when and how a prospect will make a decision and in some cases whether they will make that decision in your favour.

Viewed as a buyer

For suppliers to understand how to use compelling events to smooth decision making it is necessary to first understand decision making through the eyes of the potential customer.

A compelling event is quite simple in concept; it is something that prompts the prospect to make a decision. At a high level decision making falls into two main areas; to satisfy a need or to satisfy a want, for example, you need to insure your car and your house but although people say “we need a holiday” this is in fact a want driven decision.  Need based decisions are driven by the head while wants are driven by the heart. However, in most cases, there will be a mix of head and heart even though one will dominate.

So, taking the insurance need above, if your insurance expires at midnight tonight you must make a decision during business hours today; time becomes the compelling event. If however money is the compelling event, early research will be required; to obtain several quotes and then drill down into the detail to make the final decision. When getting down to the fine detail of the similar quotes the heart may start to play a part in the decision making as you choose between known and less well known providers and their ‘specials’.

The holiday is mainly about satisfying a want so is driven by the heart but as you close in on the final choice, money will become a factor and the head will get involved.

While the examples above could apply to a business they are more typically personal buying examples.  A common business issue requiring a decision could be about a new website; do you need or want a new website?

  • If the website is delivering less and less good enquiries and it is a key route to market for you then you need a new website.
  • If the website is still functioning well but you feel it is looking a little dated then you may want to replace it.

Note the hard fact of falling levels of enquiries = need whereas “feeling” that the website looks dated = want; head and heart.

Viewed from the seller’s point of view

Simplistically this is a mirror image of the buyer’s view point and the concept really is quite simple. Find out what really matters to the buyer, satisfy it and it will increase your chances of getting an order when you want it to happen. The point to emphasise here is what matters to the buyer? Sellers make offers that they hope will be compelling but all too often the offer is driven by the seller’s need rather than the buyer’s. “If you buy by X date we will give you an extra 5% discount.”  The seller wants the order by X date but does it matter to the buyer?  Will 5% incentivise them to make a decision now when they do not really need what you are selling at this precise point in time?

The problem here is that the inducement is focused on the monetary aspects of the transaction and will have the effect of destroying any work that has been done to build interest in the value of what is being offered.  Even if the decision is delayed for another two or three months the supplier may still feel obliged to give the extra 5% but they have not gained what they needed; an order now!

Useful examples of compelling events

Time: most effective when you know what matters to the buyer and this should be established as early as possible in the engagement process.  This gives you the opportunity to discuss timing with them as a part of the complete negotiation and they might agree to a timescale to suit you. Calling them today looking for an order by the end of the month can only ever look desperate.

Could you resist the opportunity?

Could you resist the opportunity?

Time can be useful in a number of ways:

  • If you genuinely have limited stock “buy now while stocks last” can work.
  • If what you provide is seasonal then timing is important.  No point taking an order so late that the Christmas cards get to the shop on Christmas Eve!
  • If what you are selling will save them money, has a safety implication or could prevent an expensive problem occurring then the sooner they have it the better.
  • If you can provide a solution to accommodate an impending regulatory or legislative change, they have a limited window in which to decide.
  • If you know they are running out of stock they have a real need to make a decision.
  • If you know their current supplier contract is up for renewal, regardless of how happy with that supplier they claim to be, this is a great time for you to propose your solution.

Money: most commonly used through a discount offer but as with time, calling a few days before the end of the month and offering a discount for a decision is transparent and looks desperate.  If you do offer a discount it must be tied to something that you need or want and if it does not happen you must withdraw the discount offer – I know you won’t want to but you must!

Money can be very useful to create a compelling event:

  • If you are able to demonstrate through, for example, the RoI that will be gained by buying your proposed solution then the buyer will have some tangible evidence as to the value of what you will deliver.  If what you sell reduces energy costs then the sooner they have it the more they can save.
  • If you genuinely have a price increase coming along in the new year you should share this with the buyer as they may wish to buy ahead to save money.
  • Discount can be useful in some businesses but in others it will have little effect; but beware as there is always the risk that it can damage your brand and also any case you might have built up based on the value of what you do.

Problems: Understanding the problems your prospect has will provide the raw material for building your case around a compelling event.

  • If the company has breached a regulation such as Health and Safety and what you provide would have prevented this breach they will be interested.
  • If buying your solution now will help them defend their case with the H&S Executive they will be interested.
  • If the business has lost money due to a production failure that your solution would have prevented they will be interested.
  • If the company is suffering high levels of staff turnover, and you can help them reduce this, they will be interested.

It is important to note that the examples above are generic as this will be read by people from a cross-section of business and industries types.  This technique is at its most powerful when used by a supplier who really knows what makes their industry tick and what really keeps their customers awake at night.

The other thing to bear in mind is that the supplier must take the actions to create the feeling of ‘compulsion’ in the prospect.  A useful technique for this is the SPIN® approach to selling.  In effect SPIN® is a specific application of the structured questioning approach where the mnemonic stands for Situation, Problem, Implication and Need-payoff.  By asking the sequenced questions you will be exploring the situation the prospect is wrestling with, help them define the associated problem, help them to realise the implications of not resolving the problem and finally you demonstrate the value you will deliver by satisfying the need.

Within the above process; around the ‘P‘ and ‘I‘ stages, you will be able to demonstrate your industry knowledge and perhaps even introduce new ideas they had not considered that will make working with you even more compelling; you are an extra brain on their problem!

Thank you for reading this, but don’t let those queries slip away unanswered, or for a deeper discussion on researching your prospect to create compelling events, feel free to get in touch.

(Photo:   Kakakrokodil, Flickr)

Article produced for Talk Business News November edition

Customer engagement for win-win deals

Customer Engagement

If your customers are slow to make decisions and your pipeline forecast is forever moving, we can help you.

If your sales force are submitting bids with a low uptake so you feel you are just providing free consultancy, we can help you.

Markets are changing and customers have more opportunities for research before they buy, consequently the sales force has different challenges in order to engage with customers. Gaining insight into your Customer’s world and thereby understanding how you can deliver greater value than your competitors can be key to how you approach your target market.

We have helped companies in various sectors re-focus their propositions and markets for greater customer engagement, leading to more new and extension business. This also assisted the sales management to obtain more reliable forecasts.

“Working with Performative greatly improved the quality of engagement with potential customers and our ability to forecast outcomes from those.” MD, Mobile Technology company.

Feel free to call us for a confidential discussion.

Pipeline or a pipedream – they may be in your pipeline, but are you in theirs?

I have lost count of how many times I have heard; “we have got lots of great opportunities in the pipeline but no one is making a decision”. This leads to the obvious question; they may be in your pipeline but are you in theirs?  In other words, you think they should be excited by your proposal and what it offers them but were they in a position to make a decision when you decided to send your proposal?

Read our case study on how a globally acquisitive business brought consistency and accuracy to their sales pipeline

Read our case study on how a globally acquisitive business brought consistency and accuracy to their sales pipeline

Too often proposals and quotations are presented because the supplier feels that their selling process has arrived at that stage.  However, the proposal or quotation should only be presented to the prospect when they are the right point in their buying process not when you are at a particular point in your selling process.

Your sales process should be built around qualification and quantification profiling that tells you what buying state the prospect and the opportunity are in at any point in time.  Knowing where the prospect is in their buying cycle enables you to accurately plan and execute your next action and you will be pushing against an opening door.  This can then provide a reliable means to calculate probabilities which in turn provide a dependable source of forecasting information (timing, value and likelihood).

Some tips to implement this approach to pipelines;

  • Your actions must be based on the status which is a direct reflection of where the prospect is in their buying cycle.
  • The qualification and quantification rules must be consistent across all sales people, territories and regions.  Most sales people will have their own approach to probabilities, e.g. “I feel this one will drop”, but you need a system that provides dependable leading indicators as to future potential business.
  • Apparently contradicting the previous point the evaluation approach should allow both objective and subjective inputs but the objective appraisal should dominate.  If the sales person feels strongly that something will happen then they should be challenged to justify their position by providing tangible evidence.
  • Some may argue that sales people are individuals and depend on their gut feelings and experience.  We have already discussed experience.  There is nothing in a systematic approach to selling that prevents the sales person being an individual in fact the process means they do not have to spend a lot of time on the day-to-day leaving them free to be creative and inventive with their solutions.

If you have a rigorous process you have a pipeline. If you do not it may well be only a pipedream.

Global Mailing

The Outcome:

Performative’s work assisted Global Mailing to define and articulate its market proposition and refine its selling operation to exploit its unique position.

“It has helped us to refocus on our current products and also to look at new markets and we are working as a board far more efficiently.”  Director, Global Mailing

The Challenge

“Global Mailing is a company with an approachable human face that passionately believes in the creation of close working partnerships between customers and suppliers. By maintaining professional and straightforward communication, we continually address customers’ specific requirements, and are able to respond quickly and effectively should any unexpected demands present themselves.”

Global Mailing has a well-established international mailing business, but was promoting low price as its key differentiator.  The company wanted to grow and asked Performative to assist in analysing and addressing the issues that were preventing this from happening.

The Performative Solution

A series of structured steps enabled Performative to help Global Mailing achieve its objectives:

  • A Sales Maturity Assessment (SMA) provided an initial view of sales capability.
  • A Win-Loss review exercise proved a valuable method to uncover Global Mailing’s true differentiation as viewed through the eyes of its customers.
  • A Market Focus Review (MFR) built on the findings of the Win-Loss review which was used to develop the market proposition.
  • Work with the Executive team included business planning around the new proposition and creating a robust forecasting mechanism to enable annual revenue targets to be set.  The work with the Executive team also served to improve the effectiveness of the board and to support the creation of a three year strategy and business plan.
  • The new business plan was mapped into a sales action plan that included:
    • Creation of clearly defined and equally valued territories with an associated re-structuring of the sales team to reduce tension over prospect allocation.
    • Focus on key customer types to build knowledge of customer business to improve service and loyalty.
    • Development and implementation of a Sales Handbook covering all relevant and important sales steps and processes, in particular:
      • Pipeline creation and management.
      • Introduction of the CAPO ratio – Calls : Appointments : Proposals : Orders –  to refine forecasting accuracy and aid sales activity planning.
    • Assistance with sales recruitment to supplement the team.
SAM Learning, business growth, sales recruitment, sales training

SAM Learning

The Outcome:

The CEO was able to confidently transition to the US leaving a well-run UK operation with a good sales team that was maintaining market share in an increasingly competitive environment.

“Having Performative involved in crucial sales appointments gave me peace of mind to leave the UK and build our US operation. Subsequently, they have delivered a number of training interventions for the UK sales staff.  The proof of the pudding is in the eating; two years on and the business is going from strength to strength.”   David Jaffa, CEO, SAM Learning Ltd

The Challenge

SAM Learning is a leader in cross-curricular on-line revision and exam practice, providing students with imaginative and interactive ways to learn.

Performative was initially engaged due to the pending move of the Chief Executive Officer (CEO) to the US to start SAM Learning over there.  This situation meant that the UK required a senior executive to run the business in the UK.  There was also recognition that the UK required some support for the sales teams who were facing increasing competition in the market.

The Performative Solution

The first task for Performative was to use its sales experience to recruit a UK Sales Director.  Performative used a multi-step interview process and candidate profiling.  The chosen candidate was a success and has since become to UK Managing Director.

Performative did multiple projects thereafter including:

  • Delivering custom designed selling skills workshops for the UK field sales team to help the existing team of account managers to develop new business hunting skills.  This has paid off in the form of new customers being created and more accurate sales forecasts being produced.
  • Providing support in the final selection of a new business sales person for the US operation.
  • Providing sales skills training for the internal telesales team to enhance the skills of the team in three main areas:
    • Making new business appointments for the field sales team.  This included work on improving the profiling of potential customers to increase the effectiveness of the calling.
    • Increasing their skills to more effectively close small new business opportunities on the telephone.
    • Increasing their skills when “farming” existing accounts to get extension business.
mantix, business performance improvement